Financial Analysis and Economics Quiz
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Questions and Answers

Which of the following is a liquidity ratio used in financial analysis?

  • Equity Multiplier
  • Return on Assets
  • Cash Ratio (correct)
  • Debt to Assets Ratio

Is the statement 'The legal entity sole trader/sole proprietor refers to a person and not any legal entity' true or false?

  • False
  • Partly true and partly false
  • Cannot be determined from the given information
  • True (correct)

Which of the following can be identified as an economic factor in a PEST analysis?

  • Labor laws
  • Inflation rate (correct)
  • Research and development
  • Trade restrictions and tariffs

What does Economies of Scale mean?

<p>Reduction in the average costs of production when output is increased (D)</p> Signup and view all the answers

Which of the following is considered as an internal financial resource?

<p>Retained earnings (A)</p> Signup and view all the answers

Which of the following items is reported as variable costs?

<p>Raw materials (B)</p> Signup and view all the answers

Which of the following situations may increase price sensitivity?

<p>Having a higher total expenditure (C)</p> Signup and view all the answers

Which of the following objectives of pricing strategy would be considered inappropriate?

<p>Achieving cooperative relation with competitors to share the market (A)</p> Signup and view all the answers

Penetration pricing is:

<p>Typical in mass market products, like chocolate bars, food stuffs, household goods, etc. (B)</p> Signup and view all the answers

An agreement between independent, otherwise competing companies to regulate the price and sales conditions of the products or services they offer, is called:

<p>Cartel (A)</p> Signup and view all the answers

Which of the following methods of evaluating capital investments considers the time value of money?

<p>Net Present Value (A)</p> Signup and view all the answers

The legal entity sole trader/sole proprietor is characterized by:

<p>Unlimited liability (B)</p> Signup and view all the answers

Liquidity ratios used in financial analysis include:

<p>Cash Ratio (D)</p> Signup and view all the answers

Overheads (overhead costs) are also reported as:

<p>Indirect costs (D)</p> Signup and view all the answers

Economic Profit:

<p>Takes into account both implicit and explicit costs (A)</p> Signup and view all the answers

Equity in the Balance Sheet includes:

<p>Capital stock (B)</p> Signup and view all the answers

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